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EUR/USD Testing Bottom Of Trading Range

By Al BrooksForexNov 09, 2018 12:32PM ET
www.investing.com/analysis/eurusd-testing-bottom-of-trading-range-200357708
EUR/USD Testing Bottom Of Trading Range
By Al Brooks   |  Nov 09, 2018 12:32PM ET
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EUR/USD
EUR/USD

The EUR/USD daily chart has sold off for 3 days from a wedge bear flag at the 20-day EMA. The bulls need a higher low, which would create a double bottom pullback buy setup.


The EUR/USD daily Forex chart has sold off for 3 days from a bear flag at resistance. They want the selloff to break strongly below the August/October double bottom. The August low is also the neckline of the 500 pip tall July/September double top. A measured move down would be 1.08 over the next several months.

However, the daily chart has been in a trading range for 6 months. Trading ranges resist breaking out. Consequently, if the bears get their breakout, it will probably fail within a few days. There is support around 1.12. A reversal there would be from a wedge bull flag on the weekly chart, using the November and August lows. But, if the bears get a series of bear bars closing on their lows, the breakout would then likely fall at least 200 more pips. Traders would then start thinking that 1.08 was possible.

Overnight EUR/USD Trading


The EUR/USD 5-minute chart has been in a 30-pip range overnight after yesterday’s selloff. If the bulls can rally today, it would then be a buy signal day for Monday. The pattern would be a double bottom pullback.

Alternatively, if the bears can get today to close below last week’s low, this week would be an outside down week. This would create a sell signal bar on the weekly chart. In addition, it would be a break below the August/October double bottom. Even if today closes near its low, it would be a sell signal bar on the daily chart.

Importance Of Friday’s Close

Since the 5-minute chart has been sideways, day traders are scalping. But, today is unusually important. A rally would create a buy signal bar on the daily chart. But, a close near the low will create a sell signal bar on the weekly chart. A close below last week’s 1.1301 low would create a stronger sell signal bar on the weekly chart. These possibilities could affect the next several weeks. There is therefore an increased chance of a breakout up or down today.

EUR/USD Testing Bottom Of Trading Range
 
EUR/USD Testing Bottom Of Trading Range

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Emmanuel Oduor
Emmanuel Oduor Nov 11, 2018 2:26PM ET
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Nice
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Ekow Quagraine
Ekow Quagraine Nov 11, 2018 9:46AM ET
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Powerful analysis need to place much premium on this
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Tino Rivai Sutrisno
Tino Rivai Sutrisno Nov 09, 2018 11:25PM ET
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nice analysis brooks
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